HMX Acquisition committee asks court to modify asset sale procedures

By Caroline Salls

Pittsburgh, Nov. 20 - HMX Acquisition Corp.'s official committee of unsecured creditors objected to the bid procedures for the proposed sale of the company's assets, according to a Monday filing with the U.S. Bankruptcy Court for the Southern District of New York.

Specifically, the committee is asking the court to modify the terms of a previous bid procedures order and give the creditor group more time to analyze the marketing materials, assets and liabilities and other information outlined in the objection and raise any new or supplemental objections at a date to be determined by the court.

The committee said it does not object to the sale of substantially all of the company's assets, but it does not believe that the proposed sale procedures will maximize the potential value of those assets.

The creditor group said it objects to the following portions of the proposed bid procedures:

• The provisions of the procedures that grant the company unfettered authority over auction procedures, including the authority to determine what bids are qualified bids, set the overbid increment at the auction and determine the winning bid at the auction;

• The accelerated nature of the sale process and lack of information available to the committee, which makes it extremely difficult for the committee to analyze the terms of the deal and sufficiently value the assets being sold and liabilities being assumed;

• The difference in the purchase price depending on whether the sale is to the stalking horse bidder or, alternatively, any other bidder;

• The break-up fee, which the committee said "is on the extreme high end of typical fees of this nature and is far too high for any kind of a liquidation-style sale of the debtors' assets;" and

• The impact that the sale of assets to a new company formed by the company's chief executive officer has on the proposed sale process.

HMX, a New York-based tailored clothing company, filed for bankruptcy on Oct. 19. The Chapter 11 case number is 12-14300.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.